Sunday, March 8, 2009

Financial genius can't calculate correctly

THE TIERS OF A CLOWNBy DAVID SEIFMAN, NY Post

The city's own documents show it would save $35 million in the first year after proposed pension-tier reforms, not the $200 million Mayor Bloomberg included in his budget, a watchdog reported [Friday].

The Independent Budget Office said the $200 million estimate left many observers "scratching their heads," since the pension changes Bloomberg's requesting from Albany would apply only to new employees.

"The mayor's savings estimate seemed very high," said the IBO's Doug Turetsky.

He pointed to two memos submitted by the city to the state Legislature in support of a fifth pension tier with reduced benefits for new hires that estimated the savings at $35 million in year one, growing to $700 million in the 20th year.

A mayoral spokesman explained that if a new pension tier is approved, the city would take the savings up front.

"Extending the retirement age immediately stretches the city's payments, for the same costs, over a longer period of time," said the spokesman. "So the city pays less per year right away."

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